Monday January 26, 05:29 AM
Nikkei edges up as Kyocera gains but earnings a worry
TOKYO, Jan 26 (Reuters) - Japan's Nikkei (news) stock average edged
up 0.5 percent on Monday as Kyocera Corp (Munich: KYR.MU -
news) rose to bolster
the market, although a profit warning from Komatsu Corp
fanned worries about company earnings and capped gains.
Investors snapped up battered shipping firms on the view that
they'd been oversold and hopes that Chinese imports might be
picking up, while drug firms and other defensive shares rose.
But the biggest drag on shares came from fears about earnings
as Japan's corporate results season moves into high gear, with
Sony Corp (Munich: SON1.MU - news) due to announce on Thursday after warning of
massive losses last week.
'This week we have one set of results after another, and
Komatsu (Berlin: KOM1.BE - news) 's warning has scared investors,' said Takashi Ushio, head
of the investment strategy division at Marusan Securities.
'We know this results season will be bad, and this is
inhibiting buying.'
The benchmark Nikkei gained 32.57 points to 7,777.82
after earlier falling as far as 7,675.81, a fresh two-month low.
The broader Topix rose 0.3 percent to 776.01.
The Nikkei rose as the yen retreated, with some market
players saying risk aversion was easing a bit. By midafternoon,
the dollar was up 0.5 percent against the yen at 89.21 yen but
off earlier highs.
The dollar last week fell as low as 87.10 yen, the lowest
since July 1995. Investors welcome a softer yen as it boosts
exporter profits when repatriated.
Kyocera jumped 5.6 percent to 5,990 yen after financial
newspaper Barron's said the electronics parts maker is in an
excellent position to benefit from an economic recovery, as it
has strong positions in such businesses as solar panels and
cellphones.
'Kyocera could well be in good shape because it maintains a
good balance between different businesses, with its solar
batteries likely to be a key earner as the U.S. emphasises clean
energy,' said Marusan's Ushio (Berlin: UHO.BE - news) .
Mitsui O.S.K. Lines rose 5.1 percent to 558 percent
after the Baltic Dry Exchange, a key freight index, rose
3.7 percent on Friday. Nippon Yusen (Frankfurt: NYKA.F - news) , Japan's largest
shipping firm, gained 2.8 percent to 470 yen.
But gains were offset by falls in shares such as earth-moving
equipment maker Komatsu, which competes with world No.1
Caterpillar Inc (NYSE: CAT - news) and dropped 4.5 percent to 909 yen after
slashing its profit forecast for this year by a third on Friday
to well below market consensus, blaming a sudden slump in global
demand.
Sony lost 1.2 percent to 1,780 yen. The stock tumbled 7
percent on Friday after the electronics and entertainment
conglomerate warned of a record annual operating loss and
unveiled a more aggressive cost-cutting plan.
(Reporting by Elaine Lies; Editing by Hugh Lawson)
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